Investor sentiment about Europe has been slowly turning positive, and economic indicators on the Continent are surprising analyst expectations across the board.

So is this the end of the panic?

We spoke to six leading economists at a variety of top financial services and research organizations, and asked them to respond to the question: "Is the euro crisis over? And if not, what next?"

These voices don't necessarily represent the mix of optimistic and pessimistic crisis forecasts that are out there. But, it is worth noting that only one economist waxed optimistic that the "big crisis is over," despite the systemic risks that remain.

1/

"The muddle is the risk."

In Europe, the muddle is the risk. It's not the breakup of the eurozone we need to fear in 2012 but a reactive, incremental approach to crisis management that will fail to satisfy investors and could push events beyond the control of political officials. The uncertainty and volatility we saw in 2011 has only just begun.

Ian Bremmer

President of the Eurasia Group

2/

"The broader euro crisis can only continue."

The ECB's long-term repo has clearly lifted sentiment and probably postponed a banking crisis, which looked imminent in late 2011. But the broader euro crisis can only continue because policymakers still haven't addressed the underlying cause - current and future imbalances in the euro area (and who pays for them). Only full fiscal transfers can keep the euro area together in its current form and there is evidently no political appetite for that. Instead, we have extreme austerity that will only compound the region's problems. At some point (possibly quite soon), Greece is likely to leave and then we'll get massive contagion and the probable breakdown of the euro area.

Dario Perkins

Director of Global Economics at Lombard Street Research

3/

"More years of continuing fiscal consolidation and painful structural reform in the periphery will still be needed with all the attendant economic and political risks."

Is the euro crisis over? Certainly not, indeed we may not be able to say that with any confidence for a number of months, perhaps even years. But in the end, we believe the euro area should eventually emerge stronger with its current membership intact. To be sure, the conviction of our belief is not as high as we would like and the risks remain skewed to the negative.

The immediate risk relates to Greece and the restructuring of its debt which if handled badly could lead to damaging contagion and in the worst case, fragmentation of the monetary union itself.

If that stage can be successfully negotiated, the second priority for policymakers is to lower further sovereign yields in Italy and Spain, a precondition for restoring solvency in those countries; failure to do this could stretch the ability of those governments to fund themselves and would likely lead to serious impairment of banking sector balance sheets, dragging Europe into an even deeper recession as a result. But the policy tools are available to help avoid this bad outcome. The EFSF, perhaps augmented through leverage, and later this year the ESM, should provide short-term support to the euro area's impending financing needs. And to provide a credible backstop, the ECB is also likely to need to carry on providing ample liquidity to the banking system and to intervene more aggressively in sovereign markets. As agreement is secured on the long run fiscal governance issues, so it is more likely that the ECB will we more willing to play this role and help to bring yields down as needed.

Of course, even then, the crisis would not be over. More years of continuing fiscal consolidation and painful structural reform in the periphery will still be needed with all the attendant economic and political risks. By the time that period of adjustment is complete we are likely to see a new policy infrastructure up and running, with enhanced fiscal union perhaps involving eurobonds. Only then will the euro area be truly sustainable. At that point, we might be able to declare the euro area sovereign crisis over.

Peter Westaway

Chief European Economist at Vanguard Asset Management, Ltd.

4/

"The idea that no further negative headlines await us is misguided."

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The euro crisis is most certainly not over. The ECB has gone a long way towards mitigating the worst liquidity fears however the idea that no further negative headlines await us is misguided. The Euro area has been a decades long project, borne out of difficult and lengthy periods of negotiation. This is merely the latest.

Dan Greenhaus

Managing Director and Chief Global Strategist at BTIG LLC

5/

"The big crisis is over," though there are still risks.

<a href="http://www.trendmacro.com/a/about/who.asp">Trend Macro</a>

The existential crisis for the euro is largely over -- baring any political shocks, for example, like Marine LePen winning the next French presidentail election (highly unlikely). However, just because the existential crisis is over, does not mean there will be no more systemic risks coming from the euro area. The banking system is going to continue on life support from the ECB. The sovereign debt issue has gone nowhere. Each new round of austerity risks a stronger back-lash from european tax payers.

So, with the euozone, the big crisis is over. The problems are far from over though, and the unresolved risks in the system mean we could see the crisis re-emerge.

However, for investors, it is worthwhile to think of what the market is priced for at the moment. If you think it is priced in crisis mode, then it is surely over-sold.

Lorcan Roche Kelly

Chief Europe Strategist at Trend Macrolytics, LLC

6/

LTROs and bailout packages "will all buy some time, but eventually the weaker EZ countries will need a growth strategy, and will decide leaving the EZ and undergoing a competitive devaluation is the fastest way to pursue one."

For the Eurozone crisis to be suddenly over (in the absence of Eurobonds or fiscal transfers), three main issues would need to be resolved: some of Europe's debt would need to be written down, the sovereign/banking feedback loop would need to be broken and (most importantly) the Eurozone would need to have a credible growth strategy going forward.

EZ government bond yields have dropped since the end of last year and peripheral government debt auctions have gone very well in January 2012. This is largely due to the ECB's new 3 year LTRO facility, which has reduced some of the pressure on EZ banks but does not address any of the fundamental underlying causes of the EZ crisis and therefore is not a game changer.

Looking forward the next few months, I think we'll see a coercive debt restructuring in Greece, a disappointingly small take-up of the second 3 year LTRO and a bailout package cobbled together for Italy and Spain. These things will all buy some time, but eventually the weaker EZ countries will need a growth strategy, and will decide leaving the EZ and undergoing a competitive devaluation is the fastest way to pursue one.

Megan Greene

Senior Economist for Western Europe and the Eurozone at Roubini Global Economics